Informist, Wednesday, Nov. 20, 2024

--Econ secy: FY25 capex likely to be close to FY24 capex
--Econ secy: There maybe some undershooting in FY25 capex
--Econ secy: See no downside risk to FY25 growth view of 6.5-7%
--CONTEXT: Econ Secy Seth's comments at curtain-raiser of FICCI's AGM
--Econ secy: Inflation not a challenge other than food prices

NEW DELHI - There may be some undershoot in the government's capital expenditure in 2024-25 (Apr-Mar), Economic Affairs Secretary Ajay Seth said Wednesday. Capital spending during the year is likely to be close to the FY24 level, Seth said.

The government has set a capital expenditure target of INR 11.11 trillion for the current fiscal year, against capital spending of INR 9.49 trillion in FY24. Till September, the government had spent 37% of the capital expenditure target.

The government's capital expenditure in Apr-Sept was down 15.4% at INR 4.15 trillion. The government needs to spend INR 6.96 trillion in six months to meet the capital expenditure target for the year.

The government's capital expenditure had a slow start this year on account of the Model Code of Conduct in April and May on account of the Lok Sabha elections. To ensure capital spending, Finance Minister Nirmala Sitharaman has held meetings with various departments and ministries since September to review their capital spending.

Commenting on the Indian economy, Seth said GDP growth was on track to meet the finance ministry's estimate. "Don't see any downside risk to the ministry's projection," Seth said. The finance ministry has projected growth of 6.5-7% this fiscal year in the Economic Survey for FY24. India's GDP growth had slowed to a five-quarter low of 6.7% in Apr-Jun.

There are concerns of an economic slowdown, especially after the Reserve Bank of India cut its growth projection for Jul-Sept to 7.0% from an earlier estimate of 7.2%.

The underwhelming corporate performance in Jul-Sept has also added to the concerns about moderating growth. "While some indicators show slowdown, others like e-way bill generation show that the GDP growth is on track to meet the ministry's target," Seth said. At INR 319.40 million, e-way bill generation posted a record-high print in Jul-Sept.

The National Statistical Office is likely to release data on India's GDP growth for the September quarter on Nov. 29.

Commenting upon India's inflation trajectory, Seth said inflation management isn't so big of a concern now except for food prices. The CPI print for October breached the central bank's target range, coming in at a 14-month high of 6.21% due to a sharp rise in food inflation. End

Reported by Krity Ambey

Edited by Avishek Dutta

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.